Investing.com - The kiwi fell in Asia as the central bank issued cautious guidance on rates and the dollar gained as investors sough the greenback for safety on concerns over the euro.
NZD/USD traded at 0.203, down 0.83% after the Reserve Bank of New Zealand held steady as expected at 1.75% and signaled a neutral policy for now, unlike neighboring Australia which this week said it was at the end of an easing cycle.
Elsewhere, Japan said core machinery orders rose 6.7% in December month-on-month, handily beating the expected 3.1% gain. In Australia, the NAB quarterly business confidence index came in at plus-5, a dip from plus-6.
USD/JPY changed hands at 112.07, up 0.12%, while AUD/USD traded at 0.7624, down 0.27%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.11% to 100.25.
Overnight, the dollar turned lower against other major currencies on Wednesday, but losses were expected to remain limited as political uncertainty in Europe continued to weigh on market sentiment.
The euro came under pressure amid concerns over the possibility of a Brexit or Trump-style shock result in France’s upcoming presidential election.
Worries over elections in the Netherlands, Germany and possibly Italy, as well as the ongoing row over Greece's bailout added to concerns over political risk in the euro area.
Dovish remarks by European Central Bank President Mario Draghi, who on Monday downplayed calls for the bank to scale back its stimulus program, also weighed.
Meanwhile, sentiment on the greenback remained supported after Minneapolis Federal Reserve Bank President Neel Kashkari said on Tuesday that the U.S. central bank should keep monetary policy moderately accommodative.
The comments came a day after Philly Fed President Patrick Harker said he would support hiking rates in March.